After strong growth in June, consumer spending has slowed again in July according to date from Zip’s Weekly Spending Index.
The data shows Australia’s economic recovery has stagnated in response to lockdowns in Melbourne and restrictions throughout regional Victoria, as well as border closures.
Recovery remained flat in many sectors of the hospitality industry, however the stagnation could be pinned on Victoria’s restrictions. New South Wales also tightened restrictions for pubs in mid-July, before extending the same conditions to restaurants and cafes later in the month.
Combined, these restriction contributed to decreased spend (-21%) in pubs and bars for the week Monday 13 July to Sunday 19 July. There was also a drop in spending at breweries (-6%) during the same period, while spending at breweries throughout the rest of the month was higher compared to the same period last year.
Overall, spending at cafes, pubs and bars did continue trend positively, albeit at a slower rate.
Cafes were down 0.4 percent year on year in July, compared to May (down 38.6 percent) and June (down 1.6 percent). Pubs and bars were down 22.6 percent year on year, compared to May (down 73.6 percent) and June (down 30 percent).
Year-on-year spending at restaurants on the other hand was up 4.2 percent in July compared to May (down 19 percent) and June (up 6.5 percent).
Ecommerce continues to dominate. ATM withdrawals remain down (-17 percent), and purchases over online marketplaces continue to climb (90 percent).
“While these are incredibly trying times, we’re also seeing the resilient best of Australians, playing with the hand that they have been dealt,” says Peter Gray, co-founder and COO of Zip.
“Every day I see new businesses that would typically have been bricks and mortar move online to build new revenue streams, in the hope of surviving these tough periods.
“What these businesses are doing well — and all businesses should look to do – is moving with consumer trends. As more money moves online, ensure your business is there to capitalise on it.”
The Zip Weekly Spending Index is based on anonymised transaction data from a sample of more than 1.5 million Zip customers and 300,000 Pocketbook users.